ABSTRACT: In this paper we study, as in Jeon-Menicucci (2009), competition between sellers
when each of them sells a portfolio of distinct products to a buyer having
limited slots. This paper considers sequential pricing and complements our main
paper (Jeon- Menicucci, 2009) that considers simultaneous pricing. First,
Jeon-Menicucci (2009) find that under simultaneous individual pricing,
equilibrium often does not exist and hence the outcome is often inefficient. By
contrast, equilibrium always exists under sequential individual pricing and we
characterize it in this paper. We find that each seller faces a trade-off
between the number of slots he occupies and surplus extraction per product, and
there is no particular reason that this leads to an efficient allocation of
slots. Second, Jeon-Menicucci (2009) find that when bundling is allowed, there
always exists an efficient equilibrium but inefficient equilibria can also exist
due ! to pure bundling (for physical products) or slotting contracts. Under
sequential pricing, we find that all equilibria are efficient regardless of
whether firms can use slotting contracts, and both for digital goods and for
physical goods. Therefore, sequential pricing presents an even stronger case for
laissez-faire in the matter of bundling than simultaneous pricing.